September 12, 2018 / 12:14 PM / 7 months ago

Brexit no time to tinker with Help to Buy -Galliford Try

Sept 12 (Reuters) - Builder and developer Galliford Try called on Wednesday for the UK government to extend its subsidy scheme for first-time house buyers for at least five years from 2021 in a bid to head off Brexit-based risks to the housing market.

Chief Executive Peter Truscott’s comments on the Help to Buy scheme, which helps Britons get on the housing ladder, follow reports last week that the scheme could be scrapped just as a proposed transition period for Britain’s move out of the 28-member bloc expires in 2021.

He was speaking after Galliford posted a 28 percent jump in adjusted pretax profit for the half year on Wednesday, pushing shares in the company around 8 percent higher.

“If you look at the economy and you look at exit from the European Union, the risk in the market, the time is not now to start tinkering with Help to Buy,” Chief Executive Peter Truscott said.

He said that at some point the scheme should be brought to an end but that any plan should be done over five years and be clearly signposted.

The scheme has seen mounting criticism, with some commentators saying that house-builders were using the higher budgets to raise house prices and profit and keep home prices artificially high.

Rival Redrow Plc also appealed to the government last week to keep the scheme, saying it was important to prop up market sentiment.

Under the scheme the government lends new-build home buyers up to 40 percent of the property cost in London and 20 percent outside without charging interest for the first five year.

Galliford’s Linden Homes unit is among the UK’s top 10 house builders and sold 3,442 homes in the year ending June 30. The business generates about a third of the company’s total sales.

Wednesday’s results showed annual revenue rose 11 percent to 3.13 billion pounds as the firm cut down on risk in the aftermath of last year’s collapse of fellow UK construction group Carillion.

It did cut its five-year target for units delivered by Linden Homes to 4200-4500 from the original 4750-5000, citing a slightly more cautious economic outlook revenue target and leading to a slight trimming of earlier revenue forecasts.

The group’s total pretax profit, excluding exceptional items, rose to 188.7 million pounds from 147.6 million pounds in the year ended June 30.

That excluded a 45 million pound hit it took on Aberdeen’s new ring road project due to the collapse of Carillion in January.

Shares of the company were up 7.7 percent at 1076 pence at 1158 GMT. (Reporting by Arathy S Nair in Bengaluru)

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